China North East Petroleum Holdings, a leading oil producing company in Northern China, has provided preliminary oil production results for the 2008 fourth quarter and full fiscal year.
Total crude oil production in 2008 totaled approximately 645,118 barrels, a 141% increase compared to 267,516 barrels in the prior year period. The Company had a total of approximately 248 wells by year-end 2008, a 58% increase compared to 157 in the prior year. Full year revenue is expected to increase approximately 204% to $59 million from $19.4 million in the prior year period.
In the fourth quarter, the Company's crude oil production totaled 223,068 barrels, a 139% increase compared to 93,236 barrels in the fourth quarter of 2007. CNEH drilled 30 new wells in the fourth quarter of 2008 compared to 13 in the fourth quarter of 2007.
Mr. Hongjun Wang, President of China North East Petroleum commented, "We are pleased with our execution in the fourth quarter and 2008 fiscal year, which resulted in record oil production and revenue for our business. Although oil prices trended substantially lower during the fourth quarter, we expanded our oil output primarily through the installation of new wells and increased production efficiencies. We continue to concentrate on minimizing our operating expenses to maximize our profit performance during these challenging economic times.
"We remain highly focused on the further expansion of our production levels and are evaluating additional meaningful opportunities to expand our sales and margin performance. Our business remains profitable with oil at current prices and we continue to work closely with our partner, PetroChina to identify new opportunities to expand our market presence in northern China."
The Company will provide additional details surrounding its 2008 financial performance when it reports its full year 2008 financial results in March 2008.
Please note that CNEH's sole customer, PetroChina ("PTR") pays the Company a price per barrel which is calculated on a monthly basis, and is based upon a lagged, daily price per barrel average for a relatively heavy, sour grade of crude oil that trades in Singapore. This daily price index is one of a large number of crude oil price indices maintained by Platts, an international commodity and trading company. The grade of oil for which the company is paid typically trades at a discount to West Texas or London Brent crude.
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